The German government has recently begun selling millions of dollars worth of Bitcoin (BTC) from a confiscated wallet, further contributing to the lack of catalysts for a price recovery in the cryptocurrency market.
The move comes as increased selling activity and unprecedented selling by long-term BTC whales have led to a sharp price correction, preventing Bitcoin from consolidating above $70,000 and retesting its previous all-time high.
According to blockchain analysis platform Arkham, the German government has initiated the process of selling Bitcoin on cryptocurrency exchanges. During Thursday’s morning trading session, $65 million worth of BTC was sent to two likely exchange deposits, including Coinbase.
NewsBTC reported on Wednesday that the German Government moved $600 million worth of BTC, with $130 million sent to four likely exchange deposits, including Kraken and Bitstamp. Arkham’s records indicate that the German Government still holds $3.05 billion worth of BTC.
In late January, the German police seized the country’s largest cryptocurrency, confiscating 50,000 Bitcoin worth $2.17 billion. The seizure occurred after the suspects voluntarily transferred the BTC to official wallets provided by the Federal Criminal Police Office (BKA).
Moreover, recent on-chain data reveals that long-term BTC whales have sold a substantial $1.2 billion worth of Bitcoin over the past two weeks, further exacerbating the market downturn.
In a recent social media post, technical analyst Mags, provided an insightful analysis of Bitcoin’s current price action, suggesting a potential mid-range breakdown. Mags highlights two possible scenarios for the market’s future direction:
Scenario 1: Reclaim the mid-range: According to Mags, the recent pump on Thursday, which temporarily pushed the price above $66,000, has been completely retraced as BTC trades at $64,860, indicating a bearish retest on the daily chart.
Scenario 2: Retesting the range low: Mags highlight an important support level near the range low of $60,500. This level holds significance in determining the potential future trajectory of BTC’s price.
Bitcoin reclaims the mid-range level in this scenario, leading to a potential run back towards the range high. According to Mags’ analysis, if this scenario plays out, it may result in a breakout above the previous range high, suggesting a bullish trend continuation.
Alternatively, BTC may retest the range low before moving higher. If this scenario unfolds, it could lead to a prolonged period of sideways movement, potentially prolonging the consolidation phase.
However, even in this scenario, Mags maintains a bullish outlook as the overall higher time frame structure remains positive.
Featured image from Shutterstock, chart from TradingView.com
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